Tube TVs did best weathering an overall decline in television sales during the first quarter, largely due to a softening economy and a lower price point than their plasma display panel and liquid crystal display TV competitors.
Total North America TV shipments declined 34 percent in the first quarter over the previous quarter, according to recently released results from
But in comparison, shipments of the old CRT (cathode ray tube) TVs slipped only 14 percent in the quarter, the study found.
"We were initially surprised by what we saw. But when we thought about it a little more, it made sense," said Paul Gagnon, director of DisplaySearch's North America TV research. "Consumer spending is down, but people still need to shop for a digital TV, because of the regulatory changes that are coming. And when they shop for an LCD TV, even a small one, they find they're quite a bit more than a CRT and they can't afford a LCD."
Come February, the nation will be transitioning to digital broadcasting. As a result, consumers who own an analog-only TV will need to use a converter box after February 17, or own a television with a digital tuner.
But in searching for a replacement TV, consumers will find the price divide between a CRT and LCD is wide. For example, a 20-inch CRT carries an average selling price of $155, whereas a 19-inch LCD can cost an average of $376, according to DisplaySearch.
"In tight times, when money is scare but you have to buy a new TV, CRT sales will do well," Gagnon said.
During the first quarter, CRT regained its No. 2 position in the North America TV market, representing a 12 percent slice of the overall pie. LCD TVs, as usual, carried the largest slice with 77 percent market share, while plasma's brief flirtation with the No. 2 spot in the fourth quarter fell by the wayside in the first quarter with 9 percent of the market, according to DisplaySearch.
Given economic predictions are calling for continued sluggishness through the third quarter, CRT sales will likely perform better than expected during this time, he added.
That should bode well for major retailers that bill themselves as discounters, such as Wal-Mart and Target, which are a few of the places that carry the older technology CRT sets. Other major retailers carry mainly plasma and LCD TVs.
Update:This blog has been corrected to reflect that the total flat-panel display business value represents global sales.
SAN DIEGO--This year could be a turning point for the flat-panel TV industry, as it decides how it will face the dual threats of market saturation and rapidly declining prices.
The total flat-panel display business in the worldwide in 2007 was $102 billion, up from $11 billion in 1998, according to DisplaySearch. And while that growth is encouraging, it's not necessarily good news for all sectors of the market.
One of the success stories is the rise of LCD (liquid crystal display) televisions, which finally overtook CRT (cathode ray tube) TVs in units shipped in 2007 for the first time ever. Other good news for the industry: the prices of the actual panels coming out of the factories owned by Sharp, Samsung, and others, were actually up last year, something that hadn't happened since early 2003, according to DisplaySearch. Panel suppliers engineered that by creating a shortage through carefully controlled inventory.
But the picture for the year ahead isn't as rosy for everyone.
Second-tier TV brands like Westinghouse continue to drive down prices for LCD TVs, which is good for consumers, not so good for retailers and other TV makers.
(Credit: Westinghouse)"It's going to be a tough year for (original equipment manufacturers), brands, and retailers," Ross Young, president and founder of DisplaySearch, said here at the U.S. Flat Panel Display conference put on by his firm.
That's principally because the average selling price of flat-panel televisions in retail stores continue to drop, thanks to second- and third-tier TV makers that are driving down prices, as well as the growing power of Wal-Mart Stores and other mass-market retailers in the consumer electronics space.
Wal-Mart in particular is positioning itself as a place to buy traditional top-tier brands, not just cheap imports. It's expanding all consumer electronics offerings in its stores this coming year. Goldman Sachs analyst Matthew Fassler, who follows the CE industry, called it "a well-coordinated set-up" that displays and promotes brands like Samsung and Sony.
"Clearly, there's the beginning of a market-wide shift here, which for specialty retailers, doesn't bode all that well," Fassler said.
Sony first started offering specific models of its LCD TVs to Wal-Mart (and also to Target) midway through 2007 on a limited basis. Last week, Stan Glasgow, president of Sony Electronics in the U.S., told CNET News.com that his company would be expanding the number of TV models in the deal with Wal-Mart by 40 percent.
There seems to be a number of shifts occuring, including one back toward the established brands like Sony, Sharp, and Samsung, and away from the smaller players.
"This could be a shake out year in LCD TV market," DisplaySearch's Young said.
More than others, he added, it will probably help Sony in particular. "They're well positioned in the high end of market, and well positioned to take lots of share. They're making a lot of aggressive moves with OEMs, which makes things more difficult for second and third tiers."
The signs are already pointing that direction. After a poor showing in the first half of 2007, Sony rebounded in a major way in the most recent holiday season and despite its tradition of charging higher prices than its competitors, came away in the fourth quarter of 2007 as the top supplier of LCD TVs.
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